InformationWeek: The Business Value of Technology

These aren't the first Internet marketplaces to target retailers and their suppliers. One analyst firm estimates there are more than 40 retail trading exchanges. While most focus on specific retail markets, the attraction is the same: Cut costs through tighter relationships with suppliers.

"People in the supply chain are guessing what others need," says Tim Landis, VP of global processes at VF Corp. in Greensboro, N.C., a clothing maker and SoftgoodsMatrix.com's first user. "The exchange will make us look more like an integrated company."

GlobalNetXchange, the Sears-Carrefour marketplace, may become the largest retail trade hub if it delivers on its promise to bring $80 billion in combined purchasing power to the exchange. It's also one of the broadest, aimed at apparel, soft and hard goods, and groceries. "Web-enabling this process gives retailers access to every supplier on the planet and vice versa, but the power is only fully realized if everyone gets on board," says Julian Day, chief operating officer at Sears.

Getting others on board may be a challenge. One obstacle is confusion over which exchanges to join and whether to participate in more than one; another, at least for GlobalNetXchange, is that Sears and Carrefour have majority stakes and will profit from the exchange's use--potentially dissuading competitors from joining.

GlobalNetXchange's success also depends on Oracle, its sole technology partner. "There's auction and catalog capability in the Oracle Exchange platform," AMR Research analyst Greg Girard says. "A lot of the exchange's value depends on technology still in development," such as collaborative planning and forecasting.